There is a compelling investment case building around Hercules Site Services PLC (AIM:HERC).
The labour supply specialist for UK infrastructure projects has just posted a strong interim trading update, showing revenues up 17% year on year to more than £54 million for the six months to March.
It has already delivered nearly half of its full-year expectations, despite typically seeing a second-half weighting to its earnings.
What is catching the market’s attention is not just the numbers, but the momentum behind them.
Tender activity is rising across water, rail, highways and energy, and Hercules is well placed to capitalise on AMP8, the £104 billion water sector investment programme recently approved by Ofwat.
Cavendish Research has kept its forecasts unchanged, but notes the company is outperforming historical patterns.
Hercules currently trades on a 12.8x forward earnings multiple and offers an 11% free cash flow yield, levels analysts see as undervaluing its strong execution and growth potential.
Cavendish has reiterated its 70p price target, implying 51% upside from current levels.
For investors looking at long-term plays on UK infrastructure resilience and expansion, Hercules looks increasingly difficult to ignore.